Eric Meyer is the newest figure in Islamic finance and one of the most unusual. A youthful 42-year-old Catholic New England fund manager turned hedge-fund manager, turned venture capitalist, turned Islamic finance opportunist, his attempt to launch a Shariah-compliant hedge fund is causing a big stir in a small pond.
Shariah-compliant hedge funds are a contradiction to many Muslims. Everything about them seems to violate core Islamic finance principles. Money has no intrinsic value in Islamic finance so securities have to represent real assets and trading them for anything other than their face value is highly questionable. So hedge funds, which use derivatives and leverage, and which short securities, would seem to be a no-no.
Meyer and his Shariah scholars claim to have developed mechanisms that will enable Shariah-compliant investors to move into one of the most cutting-edge areas of modern finance. It's the Islamic financial engineering equivalent of building a bridge to the moon.
What attraction does Islamic finance hold for a successful venture capitalist who made his money in the dot com years by taking technology companies public and running a long-short equity fund? The self-proclaimed financial engineer with a passion for collecting old manuscripts and stock certificates from the robber baron age (he has one of the first known certificates John D Rockefeller and Standard Oil ever issued), likes a challenge.